Bloomington is divided into two markets because of 35W. Some of the differences include.
- More Homes on the West Side versus the East Side due to geography
- Home Prices are slightly higher in West Bloomington versus East Bloomington
The number of homes entering the market in Bloomington peaked in 2006 for the west side and the east side has been declining since 2005. For the most part both sides have been declining with the exception of West Bloomington seeing more homes entering the market as late as Winter 2011/2012.
With fewer homes entering the market there will be less competition among homeowners in East Bloomington resulting in a shortage of Homes for Sale and rising Home Prices. However, if more homes enter the market, such as the case with West Bloomington, we may see more competition and lower home prices.
Pending Home Sales
The number of Pending Home Sales in Bloomington, Homes with Offers, has seen a steady decline since 2005 and reached a peak in 2010 due to the Homebuyer Tax Credit. After the Tax Credit expired Pending Home fell because there wasn’t an incentive any more and resumed it’s natural increase. In this chart West Bloomington Pending Home Sales are increasing more quickly than East Bloomington.
Closed Home Sales
In this case East Bloomington Home Sales have been somewhat flat over the past ten year were West Bloomington saw the number of Closed Sales change quite a bit. Reaching peak in the early 2000s they hit a low during 2008 – 2010 and started to accelerate in mid 2011. It appears this trend is still increasing while East Bloomington is seeing a smaller change.
If Home Sales continue to rise and they out pace the number of homes entering the market this will cause a decline in Housing Inventory, which will result in fewer homes for sale and higher Home Prices.
I think what’s most interesting about this chart is how both areas followed a very similar pattern. Since there are more homes in West Bloomington it make sense proportionately there are more homes for sale in West Bloomington than there are in East Bloomington.
Here we see the result of rising Home Sales out pacing New Listings. As Housing Inventory continues to decline we will see Home Prices continue to rise.
Homes for Sale
- Buyer’s Market = More than 7 Months of Inventory
- Balanced Market = 5 – 7 Months of Inventory
- Seller’s Market = Less than 5 Months of Inventory
The Absorption Rate is trending down in Bloomington
- West Bloomington’s Absorption Rate = 4.6 Months of Inventory
- East Bloomington’s Absorption Rate = 4.1 Months of Inventory
Expectations indicate both trend lines are going to continue to decline and the market will get stronger for Sellers.
Both areas are seeing Home Prices rebounding from their lows in early 2012.
Each area of Bloomington has performed a little differently and this is a good example of why we look at market numbers on a neighborhood level and not at a city level and even more closely at the price bracket a home is in as well as comparable sales. We want to make sure we’re accurately pricing a home.
So far the Median Sale Price in West Bloomington has depreciated 10% since 2002, 26% since 2006 and has appreciated 3% since 2011. In East Bloomington Home Prices have depreciated 20% since 2002, 37% since 2006 and have appreciated 1% since 2011.
With fewer Homes for Sale in Bloomington the Median Sale Price should continue to increase as Housing Inventory becomes a premium.